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Some Plussing Up Needed Before White House Seeks USMCA Vote

U.S. trade representative Robert Lighthizer said he was in discussions with House Democrats about “plussing up” the new NAFTA and shied away on Tuesday from suggesting when the White House will ask for a vote on it. Senate Finance chairman Chuck Grassley told reporters that he hoped for ratification of the pact, which offers modest gains for food and agriculture exports, this summer or fall “or at least some time so it doesn’t get caught up in the 2020 election.”

During a Finance Committee hearing on the Trump trade agenda, Grassley told Lighthizer that tariffs, a favorite weapon of President Trump in confronting trading partners, should be a last resort. A chorus of Democratic senators called for stronger enforcement mechanisms in the the United States-Mexico-Canada Agreement, along with adjustments on labor, environment, and pharmaceutical provisions.

Lighthizer said he hoped for “substantial progress” over the next couple of weeks with House Democrats. In his written testimony, he said the administration might submit implementing legislation to Congress “very soon.” Timely adoption of the USMCA “will benefit American farmers, ranchers, and businesses throughout the country.”

Responding to a question by Sen. Maria Cantwell, a Washington state Democrat, he said, “We have to come to agreement with members (of the House) on plussing up in the enforcement side, particularly with respect, I would say, on labor and environment. I am happy to do that.” Lighthizer said his goal is broad bipartisan support of the North American trade agreement.

The USMCA would preserve duty-free access to Canada and Mexico for most U.S. food and agriculture products, which was achieved in NAFTA. It would expand somewhat the U.S. share of Canada’s dairy market, require equitable grading of U.S. wheat if it is shipped into Canada, and remove barriers to U.S. poultry. The U.S. International Trade Commission estimated the USMCA will increase U.S. food and agricultural exports by $2.2 billion, or 1.1%, when fully implemented. Canada and Mexico account for one-third of U.S. food and ag trade.

On May 30, the White House started the process for legislative action on the USMCA by sending a draft of a so-called statement of administrative action to Congress. After waiting at least 30 days, an implementation bill can be sent to Congress. Under “fast track” rules that prevent amendments or filibusters, the bill must be passed by the House and Senate within 90 session days – days that lawmakers formally meet – of introduction. The House has 60 of those days to act and the Senate 30 days. “If the House does not pass the bill in that time, the bill loses…its protections against amendment and filibuster,” says a primer by Senate Republicans on the timeline for action.

Because the USMCA would alter tariffs, it is considered a revenue bill and under the Constitution, the House must act first. “We’ve got to be patient,” said Grassley. “I hope that [Speaker Nancy Pelosi] brings it about so that she can pass it before the August summer break. If we don’t get it done before then, then of course, I hope we can get it done in September or at least some time so it doesn’t get caught up in the 2020 election.”

Trump and Prime Minister Justin Trudeau of Canada are scheduled to discuss the USMCA and other bilateral issues on Thursday at the White House.

Also on Tuesday, Trump said on social media that he will meet Chinese President Xi Jinping on the sidelines of the G20 summit in Japan at the end of this month. Trump said U.S. and Chinese negotiators would begin talks ahead of the meeting. “Our position will continue to be we want structural changes here,” said White House economic advisor Larry Kudlow. “We’ve got to have something that’s enforceable.”

Lighthizer’s office is holding seven days of hearings, concluding next Tuesday, on Trump’s proposal to put tariffs of up to $300 billion of imported goods from China. The administration already has imposed duties on $250 billion of Chinese products.

“The next round of trade war tariffs could come soon,” said Sen. Ron Wyden of Oregon, the lead Democrat on the Senate Finance Committee. If implemented, the tariffs would hit consumer goods such as laptop computers and smartphones, he said.

To watch a C-SPAN video of the Finance Committee hearing, click here.

Lighthizer’s opening statement is available here.

Produced with FERN, non-profit reporting on food, agriculture, and environmental health.
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